[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
[H.A.S.C. No. 110-65]
EXPEDITIONARY FIGHTING VEHICLE PROGRAM UPDATE
__________
HEARING
BEFORE THE
SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE
OF THE
COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
JUNE 26, 2007
[GRAPHIC] [TIFF OMITTED]
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SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE
GENE TAYLOR, Mississippi, Chairman
NEIL ABERCROMBIE, Hawaii ROSCOE G. BARTLETT, Maryland
JAMES R. LANGEVIN, Rhode Island KEN CALVERT, California
RICK LARSEN, Washington TERRY EVERETT, Alabama
MADELEINE Z. BORDALLO, Guam JO ANN DAVIS, Virginia
BRAD ELLSWORTH, Indiana J. RANDY FORBES, Virginia
JOE COURTNEY, Connecticut JOE WILSON, South Carolina
JOE SESTAK, Pennsylvania
Will Ebbs, Professional Staff Member
Heath Bope, Professional Staff Member
Jenness Simler, Professional Staff Member
Jason Hagadorn, Staff Assistant
C O N T E N T S
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CHRONOLOGICAL LIST OF HEARINGS
2007
Page
Hearing:
Tuesday, June 26, 2007, Expeditionary Fighting Vehicle Program
Update......................................................... 1
Appendix:
Tuesday, June 26, 2007........................................... 29
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TUESDAY, JUNE 26, 2007
EXPEDITIONARY FIGHTING VEHICLE PROGRAM UPDATE
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS
Bartlett, Hon. Roscoe G., a Representative from Maryland, Ranking
Member, Seapower and Expeditionary Forces Subcommittee......... 3
Taylor, Hon. Gene, a Representative from Mississippi, Chairman,
Seapower and Expeditionary Forces Subcommittee................. 1
WITNESSES
Ahern, David G., Director, Portfolio Systems Acquisition, Office
of the Deputy Under Secretary of Defense (Acquisition and
Technology); Roger M. Smith, Deputy Assistant Secretary of the
Navy (Expeditionary Warfare), accompanied by Col. William
Taylor, Program Executive Officer Land Systems (PEO LS), U.S.
Marine Corps; Lt. Gen. Emerson N. Gardner, Jr., Deputy
Commandant, Programs and Resources Department, Headquarters,
U.S. Marine Corps beginning on................................. 5
APPENDIX
Prepared Statements:
Ahern, David G............................................... 33
Gardner, Lt. Gen. Emerson N., Jr............................. 51
Smith, Roger M., joint with Col. William Taylor.............. 42
Documents Submitted for the Record:
[There were no Documents submitted.]
Questions and Answers Submitted for the Record:
Mr. Forbes................................................... 63
Mr. Taylor................................................... 59
EXPEDITIONARY FIGHTING VEHICLE PROGRAM UPDATE
----------
House of Representatives,
Committee on Armed Services,
Seapower and Expeditionary Forces Subcommittee,
Washington, DC, Tuesday, June 26, 2007.
The subcommittee met, pursuant to call, at 4:04 p.m., in
room 2212, Rayburn House Office Building, Hon. Gene Taylor
(chairman of the subcommittee) presiding.
OPENING STATEMENT OF HON. GENE TAYLOR, A REPRESENTATIVE FROM
MISSISSIPPI, CHAIRMAN, SEAPOWER AND EXPEDITIONARY FORCES
SUBCOMMITTEE
Mr. Taylor. The committee will come to order.
The purpose of this afternoon's hearing is to receive
testimony from representatives of the Department of Defense
(DOD), the Department of Navy, and the Marine Corps on the
status of the Expeditionary Fighting Vehicle (EFV) program,
which recently completed an extensive review triggered by
program delays and significant cost growth.
The hearing will consist of one panel: Mr. David Ahern,
Director of Portfolio Systems Acquisition, Office of the Under
Secretary of Defense for Acquisition, Technology and Logistics;
Mr. Roger Smith, Deputy Assistant Secretary of the Navy for
Expeditionary Warfare; Lieutenant General Emerson Gardner,
Deputy Commandant of the Marine Corps, Programs and Resources;
and Colonel William Taylor, Program Executive Officer, Marine
Corps Land Systems.
The program under review today, the Expeditionary Fighting
Vehicle, was conceived in the mid-1990's, but its primary focus
is an enduring Marine Corps mission: getting Marines from ship
to shore and then helping them fight on land.
The ancestor of the EFV is the amphibious tractor or
AMTRAC, first developed during World War II to get Marines
ashore while providing limited protection and firepower
support.
However, compared to the original AMTRAC, the EFV seeks to
make a dramatic step forward. The role of this program is to
build an armored personnel carrier with a 30-millimeter cannon
that can launch from ships 25 miles offshore and approach at 25
knots carrying 17 Marines--a daunting technical challenge.
Building armored combat vehicles for today's combat
environment, a threat that can come from any direction at
anytime is hard enough. Building one that can go 25 knots in
the water is an order of magnitude more difficult.
From the start of the program in 1995 until late 2006, the
Marine Corps and its prime contractor, General Dynamics,
appeared to be making good progress toward low-rate production
in 2007. The Marine Corps and the contractors reported that the
EFV prototypes were meeting all their performance goals.
Congress, for its part, provided strong support for the EFV
through defense authorization and appropriations legislation.
Then something apparently went wrong. Last fall, the Marine
Corps program manager raised concerns about the lower
reliability of the EFV prototypes undergoing developmental
testing. The production version of the EFV is supposed to be
able to operate about 43 hours before breaking down. The
prototypes being tested were only going between 4 and 10 hours
before breaking down, and there were many different systems in
the EFV with reliability issues.
I want to be very clear what this kind of reliability
problem can mean for Marines who operate these vehicles. Going
into combat in armored vehicles that float is dangerous enough.
If that same vehicle gets ashore far from the nearest
maintenance support and breaks down, the Marines on that
vehicle could be extremely vulnerable.
It is clear that a reliable vehicle is a must, and while I
am disappointed and troubled that the prototypes performed so
poorly after U.S. taxpayers provided more than $2.3 billion in
funds, my concern is tempered somewhat by the fact that the
Marine Corps noticed these reliability problems with the
prototypes supplied by the contractor and are trying to do
something about it now, rather than waiting until the vehicles
are in the hands of the Marines.
After these reliability problems arose, another major
decision was made by the Marine Corps, which changes the
program originally authorized by this Congress. Rather than
buying more than 1,000 EFVs as originally planned, the Marine
Corps was directed to only purchase 573.
Obviously, when you cut the number of vehicles in half,
each one is going to cost more. In this case, the cost of a
single EFV went from $6 million a copy to $17 million, which I
would believe would make the EFV the most expensive ground
combat vehicle in the history of the U.S. military.
The combination of this dramatic cost growth and
reliability problems triggered a Nunn-McCurdy review of the EFV
program by the secretary of defense. The results of that review
are the primary focus of this hearing. The Nunn-McCurdy review
decided to keep the program going but with a four-year delay
and numerous additional oversight.
While there are many important technical and financial
issues involved in a major program like EFV, I am particularly
concerned about DOD's decision to award another contract for
continued development of the EFV to the same contractor,
General Dynamics, whose poor performance led in part to the
delays and cost overruns of the EFV program.
I am concerned about what kind of message this sends to the
public and to those in the defense industry. An observer might
reasonably ask why a contractor should get $82 million in award
fees for a program that did not perform as promised and then
get, in effect, a four-year contract extension that will be
worth millions more.
At a minimum, the committee expects the panel of witnesses
today to address the following issues: Why does the Marine
Corps need this vehicle? What is the net gain in amphibious
assault capability that the EFV will provide? What happened?
Why did a program that appeared to be moving along on schedule
suddenly encounter serious reliability problems? Were there
warning signs and were they ignored? Who was responsible for
the program getting so far off track? What actions did they
take to try to fix the problems when they arose?
Why did the DOD agree to let the Marine Corps keep the same
contractor in place whose poor performance led, at least in
part, to things going wrong? Why not run a new competition so
that another company can get involved? Have lessons learned
been captured, and is there a mitigation plan in place that
would ensure that these problems will not occur again in the
future?
Congress has an oversight responsibility to the American
taxpayer. There are few programs of which I am aware that
actually meet their cost and schedule goals. That must change.
This committee and this Congress understand that advanced
combat vehicles like the EFV represent difficult engineering
challenges and are not easy to build. However, effective
program oversight, sound engineering and program maintenance
policies are supposed to manage that risk.
Congress cannot continue to just throw money at problems as
they overrun projections. There needs to be more accountability
and more openness across a wide range of acquisition projects.
This is just one.
Finally, before turning to our Ranking Member,
Representative Roscoe Bartlett, I wanted to point out that one
of our witnesses, Lieutenant General Gardner, has been
nominated by the President to serve as Deputy Director of
Program Analysis and Evaluation in the Office of the Secretary
of Defense (OSD). If confirmed, he will be the first Marine in
this very important position.
The committee wishes him well with his Senate confirmation
and new responsibilities.
I would now like to recognize the Ranking Member of this
committee and my partner in trying to solve some of these
problems, Representative Roscoe Bartlett.
STATEMENT OF HON. ROSCOE G. BARTLETT, A REPRESENTATIVE FROM
MARYLAND, RANKING MEMBER, SEAPOWER AND EXPEDITIONARY FORCES
SUBCOMMITTEE
Mr. Bartlett. Thank you, Mr. Chairman.
Good afternoon, ladies and gentlemen.
I have followed the progress of the Expeditionary Fighting
Vehicle with interest, especially because the program falls
within the jurisdiction of this subcommittee. Clearly, this
vehicle is a one-of-a-kind marvel. Comparisons to other ground
vehicles are unproductive.
The Expeditionary Fighting Vehicle has demonstrated it can
keep up with the M1 Abrams tank on land, but can the Abrams
tank be launched from a ship and do more than 25 knots to
shore?
Many comparisons to other amphibious assault capabilities
are poor. The V-22 tilt-rotor aircraft is designed for
amphibious assault, but the V-22 doesn't have a 30-millimeter
cannon and doesn't protect the Marines inside from most
nuclear, chemical, or biological attacks.
The amphibious assault vehicle, or AAV, that the Marines
have had in inventory since the 1970's provides amphibious
assault from the sea, but the AAV is over 75 percent slower and
can only be launched from two nautical miles out, as compared
to 25 nautical miles that the EFV has, and the AAV's range on
land is 40 percent less than the EFV.
But the EFV program does have one striking similarity to a
number of other Pentagon programs. It has been unable to stay
on cost and on schedule. The EFV still has a number of
technical hurdles to overcome. Like several of EFV's sister
acquisition programs in the Navy and Marine Corps, the program
is not just a little over budget and over schedule. This
program is going to cost more than three times what Congress
was originally informed.
If all goes well from here on out, system development and
demonstration is going to take nearly twice as long as
originally planned. What is even more troubling perhaps is that
the reasons for the cost and schedule growth are also quite
similar to other acquisition programs.
For example, at least two reviews of the program have found
that there was a lack of systems engineering experience at both
the government and contractor levels. Further, the schedule for
the program was unrealistic, with design reviews that were held
even when the contractor was not ready.
The level of effort on the program was not properly
adjusted to reflect funding realities. There was not sufficient
emphasis on developmental testing and the test and evaluation
master plan was not properly developed.
One of the requirements appears to have been the major
design drive, and consequently it was a major driver in the
reliability, costs, and schedule issues. Yet at no point does
there appear to have been consideration made for adjusting this
requirement and spiraling an additional capability at a later
date.
As well, despite these programmatic challenges, it would
appear that the contractor continued to earn the majority of
the award fee associated with the program. There is a
disturbing familiarity here. It almost sounds like we could
replace the name EFV with the name of other major acquisition
programs and we would be dealing with a lot of the same issues.
In this very room, we have had hearings to discuss nearly
identical issues on LCS and DDG-1000. Many of these same
challenges face V-22.
I have listened to our road fighters tell me that the
capabilities that EFV can help fill a critical gap. I hope we
will hear more about that today to assure our members that this
is not simply a program that the Marine Corps feels it has to
have because it is time to replace the AAV, but rather the EFV
provides capabilities we need for tomorrow's battle space.
However, this pattern of cost overruns, schedule delays and
apparent lack of accountability has got to stop. These are
serious systemic problems. I want to hear some serious systemic
answers. As a result of this re-certification, what are you
going to do to fix the specific issues encountered on EFV and
what are you going to do to start re-learning this lesson?
I thank the witnesses for being with us to discuss these
issues, and I thank them for their service.
Thank you, Mr. Chairman.
Mr. Taylor. Thank you, Mr. Bartlett.
Without objection, all prepared witness statements will be
accepted for inclusion in the record.
Mr. Ahern, I understand that you have an opening statement,
to be followed by Mr. Smith and Lieutenant General Gardner.
STATEMENT OF DAVID G. AHERN, DIRECTOR, PORTFOLIO SYSTEMS
ACQUISITION, OFFICE OF THE DEPUTY UNDER SECRETARY OF DEFENSE
(ACQUISITION AND TECHNOLOGY); ROGER M. SMITH, DEPUTY ASSISTANT
SECRETARY OF THE NAVY (EXPEDITIONARY WARFARE), ACCOMPANIED BY
COL. WILLIAM TAYLOR, PROGRAM EXECUTIVE OFFICER LAND SYSTEMS
(PEO LS), U.S. MARINE CORPS; LT. GEN. EMERSON N. GARDNER, JR.,
DEPUTY COMMANDANT, PROGRAMS AND RESOURCES DEPARTMENT,
HEADQUARTERS, U.S. MARINE CORPS
STATEMENT OF DAVID G. AHERN
Mr. Ahern. Thank you, Chairman Taylor. I have a very brief
opening statement.
Chairman Taylor, Ranking Member Bartlett and members of the
subcommittee, I am honored to have the opportunity to discuss
the Department's recent Nunn-McCurdy certification of the
Marine Corps restructured Expeditionary Fighting Vehicle
pursuant to the requirements of section 2433 of the Title X
United States Code.
Your letter of 6 June requested that OSD, AT&L, address
three specific issues: a description of the Nunn-McCurdy review
process; an explanation of the outcome from that process; and
any initiatives the Department is pursuing to avoid similar
challenges in other acquisition programs.
I have submitted a written statement that addresses those
three issues, and I am prepared to further discuss how the
Department addressed those issues this afternoon.
Before completing my opening statement, I would like to
mention that in order to have successful execution of the
certified EFV program, it is contingent upon receiving the full
funding requested in the fiscal year 2008 President's budget.
I thank the committee for your time today and leadership in
addressing the Marine Corps' operational needs. The committee
has consistently provided our men and women in the armed forces
with systems and support they need.
Thank you for your unwavering support, and I would be happy
to take any questions on those issues and the other issues that
you mentioned, sir.
Mr. Taylor. Mr. Ahern, with all due respect, I don't recall
you answering a single question that we just asked you.
Mr. Ahern. Yes, sir.
Mr. Taylor. I hope you know that in this subcommittee, we
regularly waive the five-minute rule to give our witnesses the
opportunity to answer questions. This isn't for show; this is
dead-serious. I want to give you a second opportunity to answer
the questions that the committee just asked of you.
Mr. Ahern. Yes, sir.
Mr. Taylor. And do it in any manner that you wish.
Mr. Ahern. In discussing the review process and the lessons
learned, I would say that we learned most specifically, the
Department's initiatives focused primarily on starting the
programs correctly, that we have the right balance of
requirements, acquisition planning, including technological
maturity, and funding. If we do that at the beginning of a
program, we stand a much better chance of having that program
proceed successfully.
Second, we have to have a very robust ability to frame
markers for early intervention for troubled programs prior to
breaches, ensuring that systems engineering processes
specifically--and I think we have done that in the EFV program
with the restructured schedule the way it is laid out--and
contract performance management systems, and I think we have
done that also with the recertification effort of the earned
value management system (EVMS) of General Dynamics, and a focus
on using the earned value management by the program office,
that they are fully utilized as key elements in indicating the
status of the program.
We are conducting a rapid review of all the major
acquisitions to identify any problem programs for early
attention based on our experience in this Nunn-McCurdy process
in 2007. Additionally, we are working to identify the effective
cost goals indicators for early acquisition program course
correction, and initiatives to improve acquisition processes
continue to be a department priority.
That, from the standpoint, as I understood your question,
sir, addresses the questions of the lessons learned from the
Nunn-McCurdy certification of the earned value management of
the EFV.
[The prepared statement of Mr. Ahern can be found in the
Appendix on page 33.]
Mr. Taylor. Mr. Ahern, we will proceed in the regular
order, but I would hope that for the benefit of everyone
concerned, starting with the Marines who will be riding in
these vehicles, their parents, their loved ones, the taxpayers
that are going to pay for these, and who have paid $2.3 billion
to date for an uncompleted program, that we will get some
better answers later on during the course of this hearing.
The chair now recognizes Mr. Smith.
STATEMENT OF ROGER M. SMITH
Mr. Smith. Mr. Chairman, Mr. Bartlett and distinguished
other members of the subcommittee, I thank you on behalf of our
sailors and Marines to appear before you today to discuss the
current status of the EFV, its restructuring following the
Nunn-McCurdy certification process, and the Office of the
Secretary of Defense's approved way ahead for the program.
Today, I will provide a joint statement, and I have Colonel
Bill Taylor with me, our new Marine Corps Program Executive
Officer (PEO) for land systems. We are going to provide the
Department of Navy's testimony on the programmatic and
technological factors that led to the EFV's reliability issues
in 2006, the outcome of the program's Nunn-McCurdy
certification, and the restructuring and management initiatives
the Department has implemented to ensure that we progress on a
successful track to fill this capability.
In the interest of time, I will close by saying the EFV is
the top priority program of the Department of Navy, or is a top
priority program of the Department of Navy, and it is the most
cost-effective way ahead as far as a restructured program, and
will provide the Marine Corps the capability to perform its
Title X mission of projecting combat power from the sea in an
increasingly anti-access security environment.
EFV's ability to maneuver at speeds in excess of 25 knots
through the water, combined with its superior land-ability,
lethality and survivability, will provide both over-the-horizon
amphibious capability and significantly greater warfighting
power projection on land than the current amphibious assault
vehicle.
I look forward to your questions.
Mr. Taylor. Mr. Smith, I am going to say the same thing to
you. The program spent $2.3 billion. Apparently, the vehicles
can't go but a few hours between major breakdowns. It is not
ready to be fielded after all this money. You have just given a
contract to the contractor who has apparently had serious
problems. You haven't told me how you are going to redress
them.
You have not done a good justification of where $2.3
billion went. As far as I am concerned, you have done nothing
to promote the purpose of this vehicle, which is to make it
safer for the amphibious assaults. You have to be further
offshore to get the Marines to the battle safely, and then get
them home safely.
The purpose of this is not to waste your time or our time,
but to explain to the moms and dads and loved ones of those
Marines what we are doing and to the citizens who are paying
for this. Would you like another chance at answering some of
the questions the committee has supplied to you?
Mr. Smith. Absolutely. I was given the guidance to provide
a short opening statement, and I will address your questions,
sir.
Mr. Taylor. With the consent of the committee members, we
think that what you have to say is important enough to where we
regularly waive the five-minute rule. And so with unanimous
consent, I would ask to do that today.
Without objection.
Mr. Smith. All right, sir. Some of the problems that led to
the poor reliability was that the program was not fully funded
in the 1990's, leading up to deferred systems engineering. And
then the deferred systems engineering that was not performed in
the latter part of the program, in the systems development and
demonstration timeframe, created a situation where we did not
fully understand when we corrected some part of the program
content from testing, something else perhaps was not addressed.
Our developmental test that was conducted did not
adequately identify the poor reliability in a number of the
systems. The vehicle did pass or did demonstrate all of its key
performance parameters with the exception of reliability during
the operational assessment. However, it could not do it
consistently, as you have addressed.
We have through four different independent assessments
determined that the lack of systems engineering that was not
performed is one of the main factors that caused the
reliability to be so poor.
Do you have anything to add, Bill?
Colonel Taylor. No, sir.
[The joint prepared statement of Mr. Smith and Colonel
Taylor can be found in the Appendix on page 42.]
Mr. Taylor. General Gardner, would you like to make your
statement?
STATEMENT OF LT. GEN. EMERSON N. GARDNER, JR.
General Gardner. Yes, sir. I would like to answer the first
two of your questions. First, Chairman Taylor, Congressman
Bartlett, distinguished members, thank you for the opportunity
to be here and thank you for your well wishes, sir.
Why do we need the EFV? The EFV is essential to the
Nation's forcible entry capability, a capability that carries
strategic weight in this dangerous world. Our concept of
projecting power is to use a triad of Marine tilt-rotor and
rotor-wing aircraft, Navy landing craft air cushions, LCACs,
and the EFV, to achieve speed and sustainable power ashore.
Without the EFV, the United States does not have the ability to
conduct surface assaults from ships over the horizon.
The necessity of over-the-horizon operations was reinforced
about a year ago when Hezbollah rebels used an Iranian missile
to successfully engage an Israeli patrol boat about ten miles
offshore of Lebanon. If we Marines were told today to perform
our primary mission of forcible entry from the sea, Navy ships
would have to operate well within the range of those kinds of
coastal defense. Rapidly acquiring the EFV will reduce the risk
of casualties and the loss of ships.
I believe that answers your question, sir, about the need
and the net gain in capability.
We believe that the acquisition community within OSD as
represented at the table today has restructured the EFV program
in a way that will give us the high-speed amphibious capability
that we need. As the final piece to our long-sought triad of
forcible entry capability, we seek the support of the Congress
in fully resourcing this program in fiscal year 2008 and the
years to come.
Thank you.
[The prepared statement of General Gardner can be found in
the Appendix on page 51.]
Mr. Taylor. Thank you, General.
General, the first question will be, how practical is it?
It seems to me it would be great to have a vehicle that can do
26 knots in the water speed with equal survivability. But how
practical is that to couple with a vehicle that is going to go
several hundred miles inland?
And the next question is, given the enemy's unfortunate
exploitation of the Humvee, and their continued improvements in
the use of mines, particularly from below a vehicle, how well
protected is this vehicle if we solve the technical problems on
the breakdowns? How vulnerable will it be to mines from
underneath? And is that being taken into account?
Nowhere have I read that that was one of the initial goals,
and that is forgivable because we didn't see this coming with
the Humvee. We didn't see it coming with the Bradley. South
Africa saw it ten years ago, but we, is the word, did not see
this coming. But we see it now, and we are taking steps with
the Mine Resistant Ambush Protected Vehicle (MRAP) now.
So what steps are being taken, once we solve the mechanical
problems and the breakdown problems, how susceptible to mines
from beneath will this vehicle be? And has that been a part of
the testing?
General Gardner. Sir, let me try and take those in order.
First, you know, the Marine Corps is a balanced force. We
are a multi-mission force, and we have to be organized,
trained, and equipped to do a multitude of missions. This is
one of the reasons that we embarked on looking at our portfolio
of armed vehicles here and reduced the overall objective from
1,013 EFVs to 573.
At the same time, we decided to balance our portfolio by
seeking in the future about 600 or so wheeled vehicles, armored
vehicles, which will then together provide the kind of
capability you would need ashore, but still provide us this
forcible entry capability from the sea.
So I would say that the EFV provides this niche. It is the
only machine in the world that provides that capability, so
zero is clearly the wrong answer. As we looked at the mission
sets and what we saw in the strategic planning guidance, we
felt that 573 was the right number to properly equip and
position assets on prepositioned ships, and in training assets.
So I think that goes after what you are talking about, is
it practical to do that. We need that capability. When we are
standing offshore from the forcible entry requirement, we need
the ability to go both air and surface, or some mix, according
to the situation at the time, and this provides that.
With regard to the protective capabilities, I think maybe
Colonel Taylor or Mr. Smith is maybe better postured to answer
the specific attributes of the vehicle, but we recognize that
there must be certain trades made when you are trying to get
all of these capabilities to provide the overall capability to
the Marine Corps.
To provide this kind of high-speed capability that we need
to be able to get up on plane, we need a flat-bottom vehicle,
and flat-bottom vehicles are not ideally suited for damage
control against buried mines. However, the side protection of
the vehicle does provide the kind of force protection that we
are seeing in the vehicles today.
Perhaps Colonel Taylor----
Colonel Taylor. Yes, sir, Mr. Chairman. Again, as General
Gardner mentioned, this is sub-optimized as compared to some of
the pure combat vehicles once ashore, but because of the
requirement to have that flat bottom so that it can get up on
plane, that is a driving factor in being sub-optimized. But
even once ashore, it does compare favorably to purely ground-
based combat vehicles such as Strykers. So it does satisfy its
firepower, armor protection KPPs.
Mr. Taylor. About two years ago right now, one of your
AMTRACs out in Anbar Province, with a number of Marines on
board, was attacked by an extremely powerful device from
underneath. Some of the Marine Corps reservists on that AMTRAC
were from Mississippi. They were a bit more fortunate than
their counterparts from Louisiana Marine Corps Reserves. That
certainly left a lasting impression on a lot of people in that
part of the world.
If this vehicle were to encounter that same device, number
one, has anyone run any tests like that? And I guess the follow
up would be, if a test has been run, would it be any more
survivable than that AMTRAC was on that day two years ago?
Colonel Taylor. Mr. Chairman, I think I would answer the
question in this context, that this is a common risk area, and
has to be addressed in the Science & Technology (S&T)
environment from a common perspective. This is not purely an
EFV concern. So EFV has not done any dedicated testing to date.
Mr. Taylor. Colonel, believe me, I respect you. I respect
your profession.
Colonel Taylor. Yes, sir.
Mr. Taylor. But we are today operating AMTRACs hundreds of
miles inland, because there is a riverine environment where you
occasionally, because of bridges being either suspect or gone,
have to have those capabilities. I understand that. I also
understand that we have an adaptive enemy who has been
learning, unfortunately pretty quickly, as he goes along.
If that vehicle were in production today--let's say we
fixed the mechanical problems--so if that vehicle was in
production today and was traveling in Anbar Province or
anywhere else in Iraq, and encountered the same explosive
device that the AMTRAC did a couple of years ago, what would be
the results? Has that been tested?
Believe me, I understand the production for this--I mean,
the faultline on this started in 1996. That was a long time
ago. I appreciate the huge technological challenges, but if we
don't address this now, shame on me and shame on all of us.
Colonel Taylor. Yes, sir. To the best of my ability, I will
answer it in this fashion. It has not been addressed on the
EFV, but it has not been addressed any better on any other
vehicle at this moment in time, but we have to get there.
Mr. Taylor. Well, given the Marine Corps' crash program,
and I respect that crash program, to try to field an MRAP,
because of what we have seen happen to the Humvees and other
flat-bottom vehicles, why isn't this being looked into? The
program is already behind schedule, so if we are going to build
it, and if the Marine Corps tells me they still want it, I want
to work with you to build it.
If we are going to build it, why don't we build it in a way
that would make it more survivable to a threat that we didn't
know existed ten years ago--should have known, but didn't--but
we certainly know exists now?
Colonel Taylor. Yes, sir, I will take as an action to see
what is being done.
Mr. Taylor. Do you mind if I turn to your left?
General Gardner. Sir, I would just say that in a sense of
the penetrating capabilities of underbelly mines out there, we
are somewhat limited by the flat belly, but there are things
that have been done to the EFV that make it more survivable in
any kind of incident than the current IED out there--an
improved fire extinguishing system; spall liners--these sorts
of armoring things out there do make the vehicle more
survivable today on the battlefield, that same vehicle today
out there.
Now, where that particular mine went though, I cannot sit
here and testify that it would not penetrate, it would not
cause injury and death. But I do feel that we have done
everything else within the capability of the vehicle to put in
the kind of survivability--things like fire extinguishing
capability. You can help me out here maybe with general
capabilities, those sorts of things.
Mr. Taylor. I understand the need for a lifting body. I
understand buoyancy, but you can also get a lifting body with a
V-shape. It is a bit more difficult. It actually makes the
vessel more seaworthy, and it certainly would make it more
survivable to an attack like that.
So my question is, if we are this far behind schedule; if
we are looking at other things, why aren't we looking at that
as well? Because I would hate to rush to production a vehicle
that within several months, 60 Minutes, and moms and dads all
across America are saying, ``What in the heck are you all
doing? Why did you send my child to battle in something you
knew had a flat bottom, when you are in the process of
replacing every Humvee in-theater for the Marine Corps?''
General Gardner. Sir, I would just submit that my
understanding of what the ability of industry is to produce and
the capabilities out there, and the various threats which
continue to evolve and challenge us even in the MRAP program,
that we have to balance risk as well as we can against mission
capability. We are probably not going to have every vehicle at
every time going to have an equal amount of force protection to
the most armored of vehicles.
Of course, that would be a laudable goal to get there, but
technologically we need those kinds of science and technology
efforts that Colonel Taylor mentioned. We believe that there is
some balance of risk that takes place if you are going to
achieve some of these niche mission capabilities.
Mr. Taylor. Okay. Did any of the proposals, either in the
beginning or more recent proposals for this program, include a
V-shaped bottom?
Colonel Taylor. I am not aware of any, sir. I believe that
the physics would then preclude you from being able to achieve
your high water speed KPP with a V-shaped hull.
Mr. Taylor. Again, I respectfully disagree. It would make
it more difficult. You are not going to get the kind of lift.
They build V-bottom boats every day all across the country that
achieve great speeds.
The chair yields to Mr. Bartlett.
Mr. Bartlett. I am interested in totally understanding why
making it V-bottom would make it less like a boat. Most boats I
am in do have a V-bottom. I think properly designed, that
shouldn't be inconsistent with our goal of high water speed,
should it? Because every boat I have seen going fast on the
water, has a V-bottom rather than a flat bottom. Am I correct?
Colonel Taylor. Yes, sir. I believe it comes down to the
weight and torque ratio. I really believe it has a lot to do
with the existing vehicle's ability to get up on plane. That is
what allows it to achieve that last percentage of high-water
speed, once it gets up on plane. Without getting up on plane,
this vehicle right now tends to wallow down in about the 14- to
17-knot range.
Mr. Bartlett. Almost everything we do is the result of some
compromise. I agree with the chairman that this newfound
vulnerability in the Humvee would appear to necessitate a look
at this vehicle to see if we couldn't build into this the kinds
of protections that were not in the Humvee, that we are now
moving to the MRAPs to get.
This vehicle clearly provides the Marines with the
capabilities that we do not now have. In deciding whether this
is a must-have or not, we need to look at this requirement as
compared to many other requirements that we have. It has been a
long while since the Marines en masse stormed a beach, hasn't
it?
General Gardner. That is correct, sir.
Mr. Bartlett. Of course, this could be used for a very
small group of people. I understand that. It has been a long
time since we en masse stormed a beach where this would be an
ideal vehicle, of course, particularly in the numbers that we
are anticipating buying.
If you knew of all the problems that we were going to have
in developing this vehicle and in looking at all of the other
needs that the Marine Corps had, if you knew before we started
this, where we would be today, would you have started? Or could
this money have been spent better in some other area?
General Gardner. Sir, we need the ability to mix our force
lines capability by air and surface, to have that surface
capability. If the threat has driven our ships over the radar
horizon, significant distances from the coast, you have to get
there. If you are going to get there from the surface, then we
need some sort of surface craft to do that.
We think this is an essential capability. I think that we
would still take the same decision. Obviously, we would not
want to see the program structured as it has been and
performing as it has been. Hopefully, we are past that with
this restructuring.
To your point, sir, about the Marines not storming the
beach in a long time, there are many capabilities that have not
been used that are essential to our Nation's security. There is
a significant deterrent capability in the knowledge of people
around the world that the Marine Corps has a viable forcible
entry capability. We would agree that we don't need too much of
it.
Once again, I go back to the mix of vehicles and getting
the right number so that we have a viable operationally
significant number of Marines that we can do in this manner.
That is how we arrived at the 573 number. This would support
surface assault of about two Marine expeditionary brigades, and
in each expeditionary brigade, about 15,000 Marines--so the
surface portion of that initial assault.
So that capability we think out there has a certain
deterrent value, and was clearly used in the first Gulf War,
and is frequently assessed as having pinned down a significant
number of Iraqi divisions, even though non-employed in the
liberation of Kuwait, as an example.
Mr. Bartlett. I have a question about the number of
vehicles. When we thought it was going to cost $5 million, we
needed over 1,000. When we learned it was going to cost a whole
lot more than that, all at once we need about half that number.
And so one wonders about the analysis that is used in arriving
at the number we need.
One last question, and this is a problem that existed in
many, many programs. Apparently, the real cost driver here was
our desire for high water speeds. That made it a very complex,
costly and potentially unreliable and difficult to maintain
vehicle. When we are designing these capabilities, is there
anybody at the table who is asking when is enough enough?
There are many of these designs that in spending 50 percent
of the money, you can get 95 percent of the way there, but that
last five percent will cost as much money as the first 95
percent. If we just accept the 100 percent as a requirement,
and nobody said, gee, could you really make do with a little
bit less, which will cut the cost in half--is there nobody at
the table that does that?
Because so many of these programs, Mr. Chairman, are driven
because of a requirement that if we had been able to reduce it
just a little might have massively reduced the cost and
complexity and kept it more reasonably on schedule and on-cost.
Who sits at the table to make these arguments?
General Gardner. Sir, as part of the Nunn-McCurdy
certification process----
Mr. Bartlett. But this is after the fact, sir. Who sits at
the table when we are designing these things and you are
telling us how much they are going to cost? Who sits at the
table asking these questions?
Mr. Ahern. I can address that question. I think that the
requirements and the program management together--the
acquisition and the program management.
I am not going to say that we have had a great tradition of
doing it well, but the recognition that cost and schedule are
flexible variables that we can get more of all the time is no
longer part of our way of doing business. There is in every
acquisition summary of the program a statement of what the
technological drivers are for cost in that program, and we look
at those every month.
Further, as we begin programs, as I mentioned in my opening
statement now, we are very sensitive to the effect of pushing
requirements against cost and schedule. We have a requirement
to check technological maturity, as well as integration
maturity, before we go forward on birthing a program.
Finally, specifically in this program, Mr. Krieg has
encouraged us as we go forward in this reliability development
portion of the program, to recognize as we get to key reviews--
the preliminary and the critical design review--that we can and
should address whether we are over-required and need to
tradeoff requirements in order to have, as you said, sir, the
85 percent or 90 percent solution, rather than spending that
inordinate amount of money and schedule to get that final 10
percent.
I think the department has that message now, that cost and
schedule are variables that we must look at and performance has
to be looked at at the same time.
Mr. Bartlett. We just underestimated----
Mr. Ahern. I think that in this particular area, and I
think that that was commented on before--this particular
program, similar to many other programs, the complicated nature
of the technology, the expectations of particularly the
waterborne speed, and the integration effort that was going to
be required, was not as well understood as it needed to be.
The analogies that were used in the initial costing in the
middle-1990's were to programs that were available at that
time. I couldn't go into which one of the programs, but I am
comfortable from going through this process that they didn't
have the analogies that were accurate to do the cost estimating
in terms of the complexity and the technological effort that
had to be made.
And so that cost estimating turned out I think to be a
significant portion of it. As Mr. Smith commented, then we
needed to have more robust systems engineering, and up front an
early developmental testing, which I think we have in the
restructured program, to show us whether or not we are on the
track--and that is the way this restructured program is
developed. Instead of being as schedule-driven, as Chairman
Taylor mentioned, it is an event-driven schedule, with an
expectation that we will carefully review it at each episode.
So in summary, to answer your question, I think it was
technology, cost-estimating connection there, and the
integration, and then the fact that we didn't put the system
engineering in to begin with to make up for those. Then we had
a more schedule-driven than an event-driven program.
Mr. Bartlett. Thank you very much.
Thank you, Mr. Chairman.
Mr. Taylor. The chair recognizes Mr. Courtney.
Mr. Courtney. Thank you, Mr. Chairman.
I am still trying to understand what the change is going to
be after the review. You were starting to describe a different
process. Maybe you can just help me, as one of the new guys
here. What does that mean?
In terms of what we were given, award fees were given out
during the 1990's and early 2000, in a process which clearly
was a mistake. I mean, it definitely seems that this process
was not working, if there were actually award fees given out.
What is going to change so that we are not going to see that
type of mistake made again?
Mr. Ahern. Yes, sir. I would like to address the award fees
specifically, but only for a minute, and then I would turn it
over to Colonel Taylor or to Mr. Smith.
First off, I think that the award fees, the way they were
structured in the 1990's and in the beginning of the 2000s,
were less objective and measurable than they needed to be, and
that has been recognized by the department. About three or four
months ago, a new directive came out on the criteria for
developing award fees, for writing award fees.
I think that the contract--and of course, the award fee
plan is a part of the contract, and that I where I will defer
to the Navy, and I will quit right now--that there were
problems with award fees earlier.
And in the specific case of this one, I would let the Navy
answer it--but that has definitely been addressed, and there is
absolutely, again as with other things that we have learned,
not only from the Nunn-McCurdy, but just other events in the
department. We reissued a varied directive not only on award
fees, but that ties into objective, measurable events.
Mr. Courtney. And so let's say as event progress or
develop, and the Pentagon determines that it is not working or
it is not satisfying what the taxpayer is looking for, what
happens?
Mr. Ahern. Those are described, and again I could defer to
Colonel Taylor, but I want to say, because I was heavily
involved in the certification, there are off-ramps described--
``off ramp'' meaning go do something else, or we need to look
at this program very hard--three separate off-ramps before we
get to a low-rate production decision. Again, the award fee is
very definitely based on an objective and measurable criteria.
Mr. Courtney. Does an ``off ramp'' mean cancellation?
Mr. Ahern. It is a possibility, yes, sir--measurable
criteria for those events that if not satisfied require a real
hard look, and that is certainly a possibility.
Mr. Courtney. Okay.
Colonel Taylor. Mr. Courtney, let me try and give you some
additional insight into the award fee. Historically, most
developmental contracts are in fact cost-plus award fee. That
is no excuse. It is just a statement of fact, probably a lesson
learned. You are correct in that General Dynamics earned $82
million in award fee payments of a potential $103 million.
Another way to look at that is they failed to earn $21 million
in award fees.
Additionally, historically award fee payments are probably
up around 14 percent or higher. There was only an available
11.5 percent opportunity and General Dynamics only earned 8.1
percent. But you could say, okay, they earned 8.1 percent for
bad behavior. Noted.
What have we done to try and improve this? First of all,
here was the award fee criteria associated with the cost-plus
incentive fee contract. Forty percent of it was given for just
the objective attainment of cost performance index (CPI) and
scheduled performance index.
So for instance, if they only achieved a .09 on CPI, they
still got 90 percent of that 40 percent. And then 60 percent
was technically oriented, but a subjective criteria. So it was
more a focus on program risk areas at a given point in time,
rather than objective and tied to critical path events.
So what have we done to perhaps address the taxpayers'
concerns? On the 15th of June, we modified the existing
contract and we will follow suit in the follow-on contract and
award a cost-plus incentive fee.
What has changed? We have designed very discrete and
objective criteria that is tied to program critical path
events--technical reviews. And we have assigned very specific
exit criteria. General Dynamics must achieve the exit criteria
at these technical reviews or they get nothing.
So in essence, Mr. Ahern mentioned three decision points.
These new toll gates associated with technical reviews add an
additional three to four toll gates for a total of as many as
seven prior to the milestone decision. Those are very discrete
events and the award fee is back-loaded, as opposed to
previously where as long as they achieved up front in terms of
CPI and SPI, it was front-loaded.
Now, you take three of the key technical reviews, it is
back-loaded. So the most critical one, critical design review,
is the point at which they must prove that they can meet the
reliability with the new design that is 50 percent of the award
fee. So it is all or nothing--50 percent at that point in time.
And then backing off from that, there is an SFR review
where they can gain 30 percent, and an SSR where they can get
20 percent. But it gets more difficult as the program
progresses for them to earn award fees, and it must be very
black and white. It is objective. They achieved the exit
criteria or they did not.
Mr. Courtney. The other question I had is, General Gardner,
congratulations on your appointment. You described again the
need for this type of vehicle in terms of some scenario that
could develop in the future. If that need popped up today, or
in the near future--I mean, obviously we are still a long ways
off of these vehicles being available--what would the Marine
Corps use?
General Gardner. Yes, sir. We would have to use our
amphibious assault vehicles, AAVs, that we currently have,
which are displacement vehicles and operate--ships come in
close to the beach, 5,000 yards off the beach; push the
vehicles out and they go ashore at somewhere around five knots
or so. Hence, they have to go in pretty close. Then you are
taking risks with those ships to come in that close.
So the Marine commander has to persuade the naval commander
that he needs to take that risk with those ships to push those
vehicles out. The naval commander will obviously push back on
that and will not want to do that, and will try and persuade
the Marine commander not to have a surface assault capability.
There are situations where you need that surface assault
capability. You cannot just do it by air. And so, it presents
us with a dilemma today, and this is a situation that the
commandant is concerned about, that we are putting our naval
commanders--we are forcing them to make this sort of risk
decision.
Mr. Courtney. Thank you.
Thank you, Mr. Chairman.
Mr. Taylor. The chair recognizes Mr. Ellsworth.
Mr. Ellsworth. Thank you, Mr. Chairman.
Thank you, gentlemen.
I am not sure who the best person is for this first
question, but this vendor on this particular vehicle has been
around a while. They are not a brand new company that has just
gotten into the business of military supplies. Is that correct?
Colonel Taylor. Yes, sir.
Mr. Ellsworth. It is your experience that--and I will go
ahead and say it--General Dynamics has provided in the past
good equipment that works, that has come in on time and on
budget, ever in history?
Mr. Ahern. Virginia class, I think, sir, is one recently.
Of course, that is not the land systems group. That is Electric
Boat up in Groton, Connecticut. That is one example that I
believe is on track now.
Mr. Ellsworth. They have done good things for our country
and our military.
Mr. Ahern. Yes, sir.
Mr. Ellsworth. I would agree with that.
Mr. Smith, there was something I would like to go back to.
You talked about the fact that this program was not fully
funded, and then you said--and I missed it; it was my fault--
the third ``blank'' engineering.
Mr. Smith. That caused a deferment. The lower funding
levels caused a deferment of the systems engineering that would
normally be done in a later period of the systems development
and demonstration of the schedule, and that is what I was
trying to articulate.
Mr. Ellsworth. Okay. I was just reading this document, and
one of the tables talked about it being underfunded by at least
$400 million, resulting in design shortcuts and inadequate
testing. That really concerns me, that if this company,
obviously a price when you sign a contract for anything it is
both sides agreeing on a price of what they think that will
cost. If you get into that, then I would expect, and it looks
like--and that will come in another question--that the company
should have come and said this just isn't enough money.
It appears from this chart that when they got into it and
because they were underfunded that they took shortcuts on a
vehicle that is going to, like I said, design shortcuts on a
vehicle that we are putting American soldiers in. I cannot
believe that this company and we would accept that we are
taking design shortcuts that are, like Chairman Taylor said, to
put our troops in a vehicle because it was underfunded.
That is a huge concern. I don't know if you want to respond
to that or not, but that is probably my biggest concern, that
they would willingly do that based on their funding. Or is it
that for $400 million less, did we take the C-team engineers to
design this at the company, because we are less? Or are they
all paid the same? I am stuttering because I am shocked, I
guess.
Mr. Smith. Let me see if I can offer a few comments in
response, sir, to help you understand perhaps a little bit
better, and for the other members. We did four different
independent reviews, and in part of the Nunn-McCurdy review
process, there was a big management review, both of the
government management structure and of the corporation's
management structure.
General Dynamics Amphibious Systems, which is co-located
with the EFV Marine Corps Program Office down at Woodbridge,
Virginia, in some instances was divorced from General Dynamics
Land Systems corporate knowledge base. Their systems
engineering capability did not matriculate down. And also
because it was a separate geographic location, we determined
that some of the management perhaps did not pay as much
attention to the oversight within the corporation.
As well, there is enough I think to go around here, the EFV
program management in the Marine Corps because it was in ACAT
1D, an acquisition category 1D program, it did not have a
typical program executive officer structure that the Navy and
other services have. It was a direct-report program manager to
the acquisition secretary in the Navy. And I don't know how
long, but it was a long time--at least since inception.
As a result, because of that lack of professional type of
flag or very senior acquisition professional officer oversight,
some of the hard questions and some of the hard reviews were
not performed. That is one of the reasons that both the
assistant commandant of the Marine Corps and the acquisitions
secretary of the Navy have selected Colonel Taylor, who was
part and parcel in really getting the MV-22 program back in the
air successfully, and selecting him as the program executive
officer now.
So with the new management structure like that in place, it
will be much more rigorous oversight from here on out. That is
one of the EFV success points that we are trying to achieve as
a way forward. So hopefully that answers you. It is a
roundabout answer, but hopefully it answers some of your
questions.
Mr. Ellsworth. Mr. Chairman, did we waive the five minutes?
Mr. Taylor. Absolutely.
Mr. Ellsworth. Okay. I just wanted to know if I need to
skip a couple of questions.
One of you said--and I don't know if it was Mr. Ahern--I am
not sure if Mr. Smith said that we could look at this a
different way. Maybe it was the Colonel. That on the bonus, the
$82 million bonus, that we could look at it in a different way,
that they got cut 21 percent because they didn't deserve the 21
percent.
In the list I am looking at in a chart in here, and going
on a list of failures, is there a laundry list somewhere of the
79 percent that they did receive of good things that this
vehicle does? I mean, are you convinced that they deserved the
79 percent of that $82 million? Where is the laundry list of
good things about this? How many of these vehicles are actually
operational right now?
Colonel Taylor. We haven't reached IOC yet, but there are
nine prototype vehicles operating out there.
Mr. Ellsworth. Is there that list we can look at that says,
``Here is why they deserved the 79 percent''?
Colonel Taylor. I think I would stop short of saying they
deserved it. They were legally entitled to it by virtue of
achieving the terms and conditions of the negotiated contract,
whether right or wrong. And I think we have taken note of your
concerns, and like I mentioned previously, we have completely
modified the existing contract to try and take a more prudent
approach to the award fee.
Mr. Ellsworth. I understand. I was a county official
before, you know, five months ago and was in on some contracts.
Even in the election, I made contract offers for a win bonus,
but you had to win for that group to get their bonus. I am
building a new jail. We had things built in, but it was at the
completion. So I understand that.
I just think the American people expect the Federal
Government--we have been around a while--and that we would do a
better job when we supply equipment to our military that if it
is good enough for the feds, it is great. So I am just a little
disappointed sometimes when we get into this situation.
I guess my last question is, and this was spec'ed out at
$6.2 million apiece in 1995. Is that accurate, according to the
documents?
Colonel Taylor. It was $6.7 million.
Mr. Ellsworth. Okay.
Colonel Taylor. And in 2007 dollars to baseline, your
comparison, it was about $6.7 in the original contract award
back in 2000, as a starting point.
Mr. Ellsworth. And now they are back to $16.9 million in
2008 dollars?
Colonel Taylor. In 2007 dollars, yes, sir.
Mr. Ellsworth. In 2007 dollars, and this contract is
supposed to go until 2025? I mean, can you tell me what is--
that is pretty drastic.
Colonel Taylor. We are actually only on the development
contract right now. The actual production contract, there is an
LRIP contract planned for 2011, if all goes well. The full rate
production decision will be in 2015, I believe. Right now, we
are strictly working with the development contract.
Mr. Ellsworth. In the contract, was there a percentage that
the company, the vendor would give us a range, a top-end of
what this could go to per vehicle, due to steel, due to
electronics, capital, whatever it might be--it could vary
between this and this so we know what the top end could be?
Colonel Taylor. Sir, that is actually the job of the CAIG
estimate, and working with their cost curves. It is really a
band and a confidence level.
Mr. Ellsworth. It just seems like a huge--a huge--gain over
those years. I know there is inflation, but----
Colonel Taylor. The majority of that, it is nearly double
the original estimate back in the 2000 timeframe, and was based
on what Mr. Ahern mentioned earlier--estimating analogy errors.
Essentially in retrospect, I think they would have been better
off comparing the complexity of this vehicle to an aircraft
instead of the legacy combat vehicles that are much more
simplistic designs. I think that was a failure in the
estimating.
Mr. Ellsworth. In closing, I thank you. I know this is not
a fun hearing for you. It is not fun for us. I would ask that
we learn from this and give the public more of what they
deserve. They may not expect perfection from any of us, but
they expect and deserve a little bit better than this. So I
would like to thank you all for your testimony.
I yield back, Mr. Chairman.
Mr. Taylor. Thank you.
Mr. Ahern, I am curious. You touched on the varied
requirements of this vehicle. One of them that really caught my
attention was that the vehicle could launch in two-foot seas 25
miles from shore.
Now, I just had an opportunity to visit with Captain Ebbs,
who retired from the United States Navy, a captain, and asked
him a couple of scenarios. How often would he see two-foot seas
25 miles off the coast of Korea? Or off the coast of Taiwan? Or
on the Persian Gulf? He felt like that was an extremely small
percentage of the time.
So given that, number one, I certainly wasn't there, but I
have seen the videos of D-Day, those Hades boats launched in
significantly higher seas than that. How realistic an
assessment was that? And you were only counting on a breeze
from shore? Again, I think it would be fairly rare that you are
having an off-shore breeze 25 miles out at sea. I don't think
that is going to happen.
So even if it failed to meet the goals that you set out to
meet, and even those, in my opinion, were unrealistically low.
General Gardner. Sir, at the risk--I will take that on, on
the requirements, with perhaps just a comment here.
We have talked the last few minutes here about something
that we see as sort of the iron triangle as we procure material
capability, of requirements, resources, and acquisition.
Instead of doing this literally where the requirements people,
the Marine Corps figures out exactly what they need; go to the
resources people; go get the money; and then go give it to
acquisition and just patiently wait.
We are working at this more like a triangle now in which
there has to be flex on the sides to achieve the objective. I
think that gets to a little bit of what Congressman Bartlett
was talking about, who is responsible here. On the
requirements, we did a detailed scrub of the overall review as
part of this process, just a bottom-up. I will be asking for
more capability here than we need in any area.
Mr. Taylor. General, I think you are asking for less
capability. I am told that the shores of Normandy, that the
bottom of that water is full of what was supposed to be tanks
that would float and swim their way into shore, and failed and
killed the crews. I sure as heck don't want to repeat that
mistake.
General Gardner. The direct answer to your question, sir,
what we are talking about is significant wave height, not seas
per se, the sea-state. I fear treading here, so I was talking
to a former Coast Guardsman about seas, but sea-state and the
seas and the swells--we are talking about the significant wave
height which is the seas above the swells--so it is that two to
three feet that we are talking about.
We have assessed that the impact of reducing from a three-
foot significant wave height to two-foot significant wave
height, probably we would encounter the difference between
those seas about seven percent to 16 percent of the time in
various places around the world, depending on where it is and
the time of year. There is a chance where you would not be able
to do a mission because you had chosen this.
The reason we went down this road was to try and achieve,
to ensure we are not asking for more than we could actually
use. We are talking about the physics of moving ashore with
this vehicle. This is not an LCAC that transits back and forth
to the beach routinely. Its primary mission is to go from ship
to shore. It is not really practical to take the EFV and slam
into head seas at significant weight in there. It is too many
Gs on the troops inside, on the passengers in there.
So it is like a driver of an EFV, as we examined this
requirement, it would not do that. We have to go to great
lengths to find seas of that nature that provide this three-
foot significant wave height above the swells to even test the
vehicle to that. And then when we find that, you set up the Gs
and do this--and probably somebody can talk to the actual tests
that are taking place. It is not something that the troop
commander would do.
So we felt that this was an area that we could take risks
and provide some weight margin to the program manager so that
he could then design in components to improve the reliability
of the system. So this is where I get to on this triangle of
making the adjustments.
We did the same thing with regard to tactical reach. The
requirement at one time previously was 25 miles ship to shore,
and then go 200 miles inland. What we said is, once we go 25
miles ship to shore and operate in an initial assault, we don't
need to fill the tank up with 200 miles worth of gasoline, with
fuel. We will fill it up with 100 miles.
At that, we could take that risk and operate. The vehicle
still has the ability to go 345 miles while ashore if it is a
land-assault-type environment. And then we removed a smoke
grenade launcher that we felt was never really used in
operational scenario.
So combined, what we did was try and find are there things
in here where we were asking for more than we would practically
use. The analogy that I have kind of thought this true, and I
hope I can use it here, is that it is going to a car dealership
and having a car that can go 100 miles an hour, and he tell
you, yes, well, if you just buy this spoiler and put it on
here, it can go 100 miles in an ice storm.
Well, yes, but why would I want to pay extra money to put
that spoiler on there to go do that? I wouldn't drive 100 miles
an hour in an ice storm. So that is sort of the thought process
behind the reduction in significant wave length from three feet
to two feet.
Mr. Taylor. General, I am less than convinced with the
answer, with all due respect. If you have only got a platform
that can be launched 18 percent of the time safely--and again,
this isn't from me, this comes from Captain Ebbs, who spent the
better part of his life at sea--in the scenarios that are
likely and foreseeable, that just doesn't make sense.
General Gardner. No, sir. It is a reduction in----
Mr. Taylor. If I may, sir? The V-hull that would make the
craft more survivable in the event of a mine would also make
the hull ride better in a heavy sea. That is simple fact.
I am concerned that you still continue to have mechanical
problems after $2.3 billion of the taxpayers' money. You have
nine vehicles to test that break down way too often. I haven't
heard anything today that gives me any degree of confidence
that you are addressing these problems. So let's walk through
this hopefully so that I can understand this.
How does the Marine Corps handle a program like this? Do
you take an officer and say, ``It is your job to make this
work; I want you to ride that contractor, find out what the
problems are and solve them and report back to me''? How does
this work, and what is the rank of that officer? How long will
he have that job? Is that his career billet or is he pulled out
of combat and stuck in this for a couple of months and then
pulled back into combat? How does that work for the Marine
Corps?
Because, General, again, this is not something unique to
the Marine Corps. We have problems with the littoral combat
ship. We had problems with the Deepwater program in the Coast
Guard. What we are trying to do is see to it that we don't keep
making the same mistakes. So I am curious how the Marine Corps
handles this now.
General Gardner. That is the defense acquisition
specialist, and he may want to answer the question, sir. Please
go ahead.
Colonel Taylor. I will at least attempt to get started
here. It has its genesis in the Defense Acquisition Workforce
Improvement Act. It specifies very stringent qualifications
training, experience--years of experience----
Mr. Taylor. Again, with all due respect, we are going to
have votes any minute now. Tell me how the program works right
now. Don't give me the script that I would read in a DOD
manual. In terms that this committee can understand that you
would be telling a friend over a cup of coffee, how does this
program work within the Marine Corps?
General Gardner. Sir, because the program has been----
Mr. Taylor [continuing]. From the uniformed Marine side.
General Gardner. Yes, sir. Because the program is an ACAT
1B program, the defense acquisition executive is the
acquisition executive for the program.
Mr. Taylor. And his rank is what, sir?
Colonel Taylor. That is Mr. Krieg.
Mr. Taylor. Who do you have in-uniform who would really
understand with a sense of situational awareness what this
vehicle is needed to do? Who do you have in uniform that has
been there, can envision this, that is following the program?
Colonel Taylor. The program manager is the rank of colonel.
He is fully qualified from an acquisition perspective. He also
has lengthy combat experience and combat vehicle experience as
an operator.
Mr. Taylor. And his name is?
Colonel Taylor. Colonel John Bryant. He is the program
manager.
Mr. Taylor. How long has he been the program manager?
Colonel Taylor. He has been the program manager since last
fall, I believe September.
Mr. Taylor. And under the normal routine, how long would he
be the program manager?
Colonel Taylor. Four years, sir, or the next milestone.
Mr. Taylor. I am curious, why isn't he here today?
Colonel Taylor. The letter requested specific attendance.
Mr. Taylor. Okay. If I could, I would like to request,
General, that we have a follow-up in a briefing forum--whatever
you are more comfortable with. I think given the severity of
the perceived problems that it would be beneficial to all
involved to get him here.
Colonel Taylor. Yes, sir.
Mr. Taylor. So keep going, sir. So you have a colonel?
Colonel Taylor. Above the program manager----
Mr. Taylor. And he is going to be doing this for four
years.
Colonel Taylor. Yes, sir.
Mr. Taylor. So he sees a problem. He sees a problem with
mechanical breakdowns. He sees a problem with unreliable
hydraulics--any number of things. What does he do then?
Colonel Taylor. I would like to approach it from a
different perspective, sir. The way that the restructured
program is laid out, he is pulled from one of the books of
acquisition doctrine and system engineering doctrine, and he
has applied to the program what I haven't seen in the past,
which is knowledge points.
He has built in five knowledge points into the program,
which are benchmarks at which point the contractor must meet
specific reliability criteria, either from a predicted
standpoint or a demonstrated standpoint, or based on
modifications, lessons learned because of underachievement--
another knowledge point is predicted.
Ultimately, the end-state, the last knowledge point, should
give you absolute confidence before it goes into IOT&E, the
final exam, that you can in fact achieve the reliability KPP
before you actually go in to test. It is a very disciplined
process that I haven't seen used before.
Mr. Taylor. I understand it is a disciplined process, but
we can also see times when the requirement didn't really fit
reality. I think a two-foot sea-state falls into that, 25 miles
offshore--it is one of them. It slaps me in the face that that
is not realistic. Okay, so does this colonel who has combat
experience, who is responsible for the lives of other Marines,
does he just sit back and say, well, that is not the
requirements; I won't look that way?
Colonel Taylor. No, sir.
Mr. Taylor. All right, when he sees something that he knows
to be wrong, what does he do?
Colonel Taylor. The acquisition benchmarks become
triggering mechanisms if at one of those knowledge points he
believes he is not on the reliability growth curve that will
ultimately achieve the reliability KPP at IOT&E. We turn to the
requirements community and ask them to assess additional trade
space.
General Gardner. The requirements, sir, are significant
wave height, not sea-state. I want to make that distinction.
Because this is an ACAT 1B program, that was a key performance
parameter, that is a JROC-held requirement. So once we develop
the idea that there is some trade space here in these
requirements, that was staffed through the Marine Corps
operational concepts thing, and then put into the joint
process, and was approved by the JROC as certification of that
process, of the requirement.
That requirement, then, the acquisition community then
seeks to fill that requirement. The Marine Corps then at that
point, you know, we are here to support the acquisition
community in terms of seeking resources from the Congress and
ensuring that our requirements are understood. If they are not
there, then we need to look at examining those.
Mr. Taylor. General, let's go back to the issue--and,
again, it is something I didn't see coming, should have seen
coming. We spent a lot of money to up-armor Humvees to have a
vehicle that is susceptible to a blast with a bottom. I say
that in that I don't want to keep making the same mistakes. You
are doing the vehicle with the flat bottom. You have people
with combat experience who have seen Humvees blown up in Iraq.
Did anyone along the way say maybe we ought to re-think
this before we go into full-scale production as far as the
bottom of this vehicle? And if not, why not?
General Gardner. Sir, we looked at the overall--we are
trying to develop a ground vehicle portfolio, if you will, of
all the vehicles that the Marine Corps has to accomplish its
range of missions. We tried to standardize all of the armoring
requirements and their resistance to threats, and we put this
on that scale.
So we did look knowing that this was not going to have the
force protection capability of an MRAP, for example. We were
led to believe that this was not possible to achieve
technologically without even more time and more delay than what
we had. So we felt that this was, while a risk, an acceptable
risk to be able to accomplish this capability in the right
time.
If we got into those threat profiles where we expect to see
this sort of underbelly mines, we would not use the EFV and the
AED in those sorts of profiles. This is a niche capability that
we are seeking to provide.
Mr. Taylor. Why would we rush to produce something that is
probably already obsolete? Because, again, I greatly respect
the Marine Corps making the most of what they have. I recently
visited your guys in Fallujah in a helicopter I am told was
built about 1972. That is pretty impressive that you have taken
care of it this long. On the flip side, it means you have to
live with your mistakes.
Why not correct that mistake before we make it?
General Gardner. Sir, I can only say that we are trying to
do that by looking at our ground vehicle mobility as a
portfolio, and providing our force commanders a choice of
vehicles, sufficient vehicle support out there so he can use
the right vehicle on the right day for the right mission.
Mr. Taylor. Who owns the rights to the work done to date on
the EFV? Is it the government or the contractor? If we wanted
to take that design and turn it over to someone else for
manufacture because we have just had enough of the folks we are
dealing with, do we have the right to do that? That is the same
question we have asked with the LCS, and same question we have
asked with the Deepwater.
Mr. Smith. I believe we do, sir, but I would have to
absolutely confirm what level of technical maturity that data
is.
Colonel Taylor. I would go one step further, sir, and say
we own the right to potentially buy the data. It does not
necessarily mean that we currently own all the data.
Mr. Taylor. Okay. For the record, would you ask the legal
community to answer that question?
Mr. Bartlett.
Mr. Bartlett. Mr. Chairman, why would we enter into a
contract where we pay for everything and give them very
generous fees for what in the real world would appear to be a
failure? And then you have to buy the data rights from them?
Weren't all these data developed with taxpayer money? Why do we
have to pay for it twice? Because that is the way we wrote the
contract?
Colonel Taylor. No, sir. This is fairly standard.
Mr. Bartlett. But why do we want to pay for it twice? We
have paid for it, because all of the money that they spent on
this program has come from the taxpayer, plus some very
generous fees. And now if we want the data rights, we have to
pay them for it?
Colonel Taylor. Typically, the data that goes into the
initial design is proprietary and the government has an
opportunity to buy the data package.
Mr. Bartlett. We run into this with many of the programs,
and we have been assured that the Navy will in the future try
to write the contract so that there is more assurance that what
the taxpayer has paid for, the taxpayer in fact will have
access to. That appears not to have been true in the past.
Thank you, Mr. Chairman.
Mr. Taylor. Thank you, Mr. Bartlett.
Mr. Ellsworth.
Mr. Ellsworth. Thank you, Mr. Chairman.
Just one last question for me, and Colonel, maybe you are
the best one to answer. You started to allude to it about what
we are doing now and the benchmarks. At what point and how
long--and I want us to have a vehicle, from the bottom of my
heart, I want the biggest, baddest military, the meanest, the
best equipped, and then I am going to fight like hell to never
have to use them, if I had to speak about a philosophy of mine.
How long do we go on, and how much--where is our end? Where
do we say, or the vendor comes up and says, we just can't
produce it; it is done; let's pull it and move on to plan. Or
we say, we can't wait any longer; we can't spend any more
dollars on this design. When does that occur? Is that one of
the benchmarks, the first one? Or a group of those?
Colonel Taylor. Any one of the seven that I pointed out,
eight, including the actual milestone to go into LRIP
production. So that decision can come by virtue of the program
manager's assessment at one of the knowledge points, that we
are not on the reliability growth curve; or it can come by way
of the acquisition decision executive at one of his three
decision points prior to the actual LRIP decision that, hey, I
am not comfortable with where the program is. So there are
numerous opportunities to assess continuing the program.
Mr. Ellsworth. Just a basic time, is that going to occur in
2008, or end of 2007-2008?
Colonel Taylor. The three decision points by the
acquisition executive comes at contract award, critical design
review, and then before committing to long-lead items for the
LRIP build. Those are the three acquisition executives.
And the first two occur roughly in fiscal year 2008. The
third would not occur until just before the actual milestone C,
so probably 2011. And then the knowledge points for the program
manager, one occurs in 2008; two occur in 2011; and one is
actually post-milestone C.
So it is over the course of about four years, there are
almost seven of them.
Mr. Ahern. I would like to elaborate on that. As Colonel
Taylor said earlier, the decision authority informed by the
program manager and other events is the defense acquisition
executive. As a result of this process, he has determined that
he wants to look into the EFV on a quarterly basis. He has
scheduled meetings with the CEO of General Dynamics, as well as
the acquisition executive in the Navy quarterly to review this
program, as is done in industry on essentially the same kind of
an investment review.
So I think besides, as Colonel Taylor mentioned, the
knowledge points and the structured formalized meetings, the
DAE working with the CEO of General Dynamics is going to keep a
very close idea, pulse, on where this program stands for the
duration of this development phase. I think that also goes to
answer your question about are we focusing on looking at how
the program manager is doing, what issues he has, and what
alternatives he has when he runs into a problem, on a quarterly
basis.
Mr. Ellsworth. Thank you, Mr. Ahern.
Mr. Chairman, I yield back.
Mr. Taylor. Hopefully in fairness to our witnesses, you
have been very patient. You have been with us for a while. Is
there anything that you would like to add at this point? I will
just open it up to you.
Mr. Ahern. I would like to go back to your original
question, Mr. Chairman. I was in the Navy. I was a program
manager for ACAT-1 program. I have made a lot of mistakes, but
now I am in AT&L. I think that the lessons learned through this
process, is that we have begun to learn earlier or implement
earlier, as General Gardner said, of the iron triangle.
We can no longer operate in that phase of a group of people
who make up requirements and then a group of people decide how
they are going to build it, and then another group of people
decide how it is going to be funded. This has been changed.
As I mentioned earlier, that lesson learned of having the
right combination of requirements, funding and an acquisition
plan, including an informed sense of where the technology
stands, is one of the clear things, or reinforcement of what
came out of this Nunn-McCurdy process. Just the visibility of
the numbers of groups of people that were involved--four teams
per Nunn-McCurdy, and we had six Nunn-McCurdys in 2007--
encourages me to think that we have all learned we have to
birth them well.
And then further, I think as has been mentioned with this
kind of event-driven schedules, the use of earned value, the
use of the other management-focused things, including the CEO
meetings, convinces me that we have applied the lessons learned
from these programs so that in the future, our performance in
acquisition in the requirements community will be improved over
what it was previously.
Mr. Taylor. What are the most recent reliability statistics
for those vehicles? I understand that they were supposed to go
about 50 hours without breaking down. Now they are doing it in
less than double digits. Is there any trend to give me or
anyone else some degree of confidence that that problem has
been overcome?
Mr. Ahern. I would defer to Colonel Taylor.
Colonel Taylor. I would say, sir, that you have brief
glimpses in an operationally representative environment via
operational testing, so those come in brief glimpses. To give
you a pure look in the developmental test environment, it is
not an apples-to-apples comparison predominantly because
developmental test vehicles are loaded with orange wire and
black boxes. A preponderance of the maintenance associated with
these vehicles--getting them ready for tests--involves
configuration and de-configuration.
So there is a disproportionate amount of effort associated
with getting prepared for developmental tests. So the metrics
are not a good comparison. The best glimpse I can give you at
this point are those knowledge points, where at knowledge point
one in fiscal year 2008, the contractor is required to provide
a new predicted reliability after the design.
So right there, we have our first glimpse of where the
design falls relative to a growth curve that will ultimately
get us to the KPP about four years later at IOT&E. So it is
really through the systems engineering process that we have to
rely right now. The developmental test process is not a very
good gauge of it. The first pure operational opportunity does
not occur until 2011.
Mr. Taylor. Are the problems across the board? Do they tend
to be one thing in particular?
Colonel Taylor. Well, 60 percent of the reliability issues
are associated either with the turret or the feed tray for the
weapons system. Both these systems are proven technology on
other applications. It is just that they weren't anticipated to
undergo the stress and strain on this particular vehicle.
For instance, the turret is similar to I believe the one on
the LPD-17. The weapons system is 70 percent common with some
of the other ground combat vehicle systems, but the feed tray
mechanism is unique. So reinforcing the structure that supports
the turret and probably a redesign of the weapon feed tray are
major initiatives to overcome what turned out to be 60 percent
of the reliability issue.
Mr. Taylor. Mr. Bartlett.
Mr. Bartlett. I have no more questions.
Mr. Taylor. Okay.
I thank you gentlemen for being here today.
The meeting stands adjourned.
[Whereupon, at 5:35 p.m., the subcommittee was adjourned.]
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A P P E N D I X
June 26, 2007
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June 26, 2007
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QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD
June 26, 2007
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QUESTIONS SUBMITTED BY MR. TAYLOR
Mr. Taylor. Were there signs, before the fall of 2006, that the
reliability of the EFV prototypes was going to be such a major problem?
Were any such warning signs elevated for review by officials outside
the program by the appropriate officials? If so, what action was taken
to address these issues?
Mr. Smith and Colonel Taylor. No. Prior to the Operational
Assessment (OA), the EFV underwent extensive developmental and
reliability testing. Test data indicated the EFV was meeting the
planned reliability growth curve; the last data point prior to the OA
measured 14.4 hours vs. a planned 15 hours Mean Time Between
Operational Mission Failure (MTBOMF). Despite this 0.6 hour shortfall,
the system was assessed to be ready for OA. However, data points during
the OA revealed the following shortcomings in the EFV program's
previous reliability test program: (1) EFV's mission essential
functions were not always utilized during reliability testing; (2) the
developmental test profiles did not closely match the operational
profiles performed during the OA. When these two factors were included
in the pre-OA reliability data, analysis showed the EFV's performance
was significantly below the planned curve. Thus, post-OA analysis
largely confirmed the OA performance, and pointed out lessons learned
to improve future developmental and reliability testing and analysis.
In response to the program's poor performance during OA, during the
fall of 2006, the Assistant Secretary of the Navy, Research,
Development and Acquisition (ASN (RDA)) chartered an Independent Expert
Program Review (IEPR) to examine the EFV program, system, and processes
in order to find the root causes of the reliability shortfall and
recommend a path forward for the EFV Program. The panel reported that
the root causes of poor reliability were: (1) insufficient funding in
early SDD that led to inadequate systems engineering rigor in design
for reliability; (2) focus on the high water speed requirement, which
drove weight and complexity at the expense of reliability, and; (3) an
overconfident program advocacy. The panel also cited shortcomings in
both government and contractor program organization and management,
oversight, and test and evaluation.
During March and April 2007, additional in-depth reviews of the EFV
reliability program were conducted by two independent teams of experts
commissioned by the Office of the Secretary of Defense (OSD). Each team
concluded that the EFV reliability requirement was achievable and that
the EFV program was employing the rigorous methods necessary to achieve
the requirement.
Mr. Taylor. What explains the decision to continue EFV development
with the same contractor? What factors led to rejection of conducting a
new competition for the new systems development and demonstration
phase?
Mr. Smith and Colonel Taylor. The Nunn-McCurdy Certification
process resulted in a decision to continue with the current program and
address deficiencies by fixing EFV. General Dynamics Land Systems
(GDLS) has been the sole EFV vehicle designer and developer since 1996.
The main design development and production efforts are planned as sole
source to GDLS because no other firm can perform the requirements of
development and production without substantial duplication of cost and
additional, unacceptable delays to the EFV program. However, the EFV
program plans to compete future contracts for certain EFV program
efforts, where feasible, to increase performance and reduce program
costs.
The factors that led to rejecting a new competition for EFV SDD-2
were cost and capability, as related to the Nunn-McCurdy Certification
process. The Nunn-McCurdy review examined three possible alternatives:
(1) Fix EFV by continuing with the current program and addressing
deficiencies within; (2) Begin a new start by initiating a new program
to provide capabilities similar to the EFV; and (3) Upgrade the
existing Assault Amphibious Vehicle (AAV).
Regarding the cost factor, the lowest Program Acquisition Unit Cost
(PAUC) was associated with the third alternative (Upgrade AAV). The
next lowest PAUC was estimated for the first alternative (Fix EFV). The
second alternative (New Start) had the highest PAUC due to additional
Research, Development, Test and Evaluation (RDT&E) costs.
Regarding the capability factor, the Fix EFV and New Start
alternatives would provide equal capabilities, while the Upgrade AAV
alternative provides less capability because of its slow speed, lack of
firepower, and lack of all-night and all-weather capability. However,
pursuing the New Start alternative would unacceptably further delay the
vehicle's availability for operational use by the Marine Corps,
increasing operational risk to U.S. forces during that period.
The Upgrade AAV alternative could provide the initial upgraded AAVs
on the same schedule as the Fix EFV alternative, but due to the slower
speed of the AAV, the operational risk to amphibious joint forcible
entry operations is much higher.
In summary, there are no alternatives to the Fix EFV alternative
which will provide equal or greater military capability at less cost.
Initiating a New Start would increase operational risk due to later
deliveries and incur more cost; pursuing the Upgrade AAV alternative,
while entailing lower costs, would provide less military capability,
given the slow speed of the AAV.
Mr. Taylor. Who owns the rights to the work done to date on the EFV
program? The government or the contractor?
Mr. Smith and Colonel Taylor. The following are the rights to
Technical Data and Software under the EFV System Development and
Demonstration (SDD) Contract:
Defining Technical Data Ownership
The Government may order during the contract, or within 3 years
after acceptance of all items under the contract, any technical data or
software generated in the performance of the contract or any
subcontract (which expires 3 years after the contractor accepts the
last delivery under the subcontract). Generally, if the Government pays
for data under cost type contracts, the Government gets unlimited
rights to that data. However, with the SDD contract, the Government
would have to further develop or procure a technical data package on
the vehicle design to support a re-competition of the EFV. A decision
was made early in the program not to purchase the Technical Data
Package. The EFV SDD contract contains a requirement for the delivery
of a final design report. The final report includes information
necessary to be able to produce, maintain and provision the EFV. The
final report is in contractor format and would not amount to a level
three technical data package.
Restrictions on Non-commercial technical data and software per DFARS
252.227-7013
There are three primary restrictions (Unlimited, Government Purpose
and Limited) on Non-commercial technical data and software as follows:
The Government receives unlimited rights in tech data for an item,
component or process developed exclusively with Government funds.
Unlimited rights is defined as: data for an item, component or process
developed exclusively with Government funds; studies, analyses, test
data or similar data produced for this contract and specified for
contract performance; form, fit and function data; necessary for
installation, operation, maintenance or training; or data with
Government purpose data rights that have expired. The Government
receives government purpose rights (GPR) in tech data for an item,
component or process developed with both Government and Contractor
funds. Purpose rights are defined as: right to use, modify, reproduce,
release, perform, display or disclose tech data within the Government
without restriction plus release outside the Government for U.S.
Government purposes. Also, Government purpose includes competitive
procurement. The Government receives limited rights when tech data is
developed exclusively with Contractor funds and marked with appropriate
legend. Limited rights is defined as: contractor must identify any data
it is asserting has restrictions in a contract attachment and not
deliver data with markings unless on attachment.
Rights in Non-commercial Computer Software per DFARS 252.227-7014
The Government gets Restricted Rights [versus Limited Rights] to
non-commercial computer Software required to be delivered or provided
to the Government under the contract if they were developed exclusively
at private expense. The difference between limited rights and
restricted rights is; under limited rights, the Government's internal
use of the technical data is unlimited with the exception of the right
to use the data for manufacturing. Under restricted rights, the
Government's internal use of the software is only permitted for only
one computer at a time with minimum backup copies permitted.
Rights in Commercial technical data per DFARS 225.227-7015
If a particular item delivered under contract is Commercial, the
Government typically only receives those rights customarily given in
the commercial marketplace to any commercial buyer. The commercial
rights provided for any commercial item typically comes in one of the
following three types of rights (Unlimited, Limited, Specially
Negotiated):
The commercial marketplace might provide for unlimited rights in a
particular commercial item. Under those circumstances, the Government
receives data without restrictions; may be in the medium of form, fit
and function data; may be in the form of correction or changes to
technical data furnished to the contractor by the Government; is data
necessary for the operation, maintenance, installation or training
(other than detailed manufacturing or process data); or is data to
which the Government already has unlimited rights.
The commercial marketplace might provide for limited rights in a
particular commercial item. Under those circumstances, the Government
receives limited rights in technical data similar to non-commercial
technical data. The Government may use, modify, reproduce, release,
perform, display, or disclose technical data within the Government
only.
Notwithstanding the commercial marketplace, the Government may seek
to gain additional license rights with the commercial manufacture
through specially negotiated rights. In such a circumstance, the
Government and the manufacturer comes to mutually agreeable terms in
connection with the specifics of any additional rights provided to the
Government.
Rights in Commercial Software per FAR 12.212
With regard to commercial computer software and commercial computer
software documentation, the Government shall have only those rights
specified in the license contained for the software. This is consistent
with the Government receiving a license for commercial software
customarily provided to the public.
Patent Rights per FAR 52.227-12
In the performance of a Government contract, the contractor may
elect to retain title to any invention created. In such a circumstance
however, the Government shall have a non-exclusive, non-transferable,
irrevocable, paid-up license to practice, or have practiced for, or on
behalf of the United States, the subject invention throughout the
world. If the Government retains title to the invention created, then
the contractor shall retain a non-exclusive, royalty-free license
throughout the world in each subject invention to which the Government
obtains title except if the contractor fails to disclose the subject
invention within the required time frames provided by law and/or
regulation during performance of the contract. As a result, for any
patents that might arise during the performance of a Government
contract, the Government typically retains at a minimum, a license to
use the invention for its purposes.
Validation of Restrictions per DFARS 252.227-7037
A Contractor must maintain records sufficient to justify
restrictive markings on technical data delivered or required to be
delivered. The Procurement Contracting Officer can request a Contractor
to justify markings- pre-challenge. The Procurement Contracting Officer
can formally challenge markings.
GD asserted restrictions on technical data and software
It appears that the Government partially funded most of items on
GD's list but further investigation would be needed to challenge GD's
assertions of technical data rights. These listed items were
incorporated by bilateral modification into the contract. The listing
does not constitute Government agreement with GD's asserted
restrictions on Government rights. However, the Procurement Contract
Officer has not challenged GD's asserted restrictions on these items:
The MTU Motoren-Und-Turbinen Union engine. [Limited/
Restricted]; The Intercom, hardware and software, developed the
Canadian Forces and Computing Devices of Canada. [Limited/Restricted];
The vehicle transmission, developed by Allison Transmission. [GPR or
unlimited]; The azimuth and elevation drive mechanisms, including the
controller arm, developed by Missile Systems Division, MOOG Inc.
[Limited]; The Air Handling Unit (AHU), the Compressor Motor Unit (CMU)
and the Nuclear Biological Chemical (NBC) Evaporator, developed by
Fairchild Controls. [Limited/Restricted]; The Compact Modular Site,
developed by General Dynamics Land Systems, Inc. [Limited]; Components
of the suspension system, developed by General Dynamics Land Systems
Muskegon Operations (formerly Teledyne Vehicle Systems). [Limited];
Engineering design concepts and interfaces for the High Efficiency
Waterjet (HEWJ), developed by Honeywell International Inc. The
following drawings are considered proprietary: [Limited]; and GDLS
process sheets for the EFV(P) and EFV(C) vehicles containing GD
confidential trade-secret manufacturing processes. [Limited/Restricted
case-by-case].
GD did not identify whether it asserts the Government has Limited or
GPR for:
GDLS life cycle support concept and architectural
development initiative which includes but is not limited to internal GD
processes and tools; Spray-cool technology, developed by Isothermal
Research Company (ISR); The Conformal Antenna (3) technology, the Radio
Antenna Interface Unit (RAIU), the HPA/LNA, and the RCS Boot material
for the VHF antennas, developed by Ball Telecommunications; The
Hydraulic Manifold Components (Pilot Valves, Pressure Switches),
developed by Predator Systems, Inc.; The Gyroscopes (MOTS), developed
by Fibresense; The Remote Acquisition Control Module (RACM) Sub-
components including Power Bus Controller, developed by Vetronics
Research Corporation; The VIC Intercom (MOTS); The Commander's Thermal
Viewer (MOTS); The Harris HF Radio, Antenna Coupler and Antenna (MOTS);
The GPS LNA (COTS); The Electronic Compass (MOTS); The Auxiliary
Navigation System (ANS); The Wireless headset (MOTS); The Computing
Devices Canada (CDC) Display technology incorporated into the Vetronics
displays; The EFV(C) cosite solution; The EFV(C) MMU (COTS).
Conclusion
The Government:
Is entitled to delivery of a final design report but
the report would not provide a technical data package that could be
used for a re-competition.
Could challenge GD technical data assertions but GD is
likely to contest these challenges as it will protect their interest in
the EFV program.
Funded much of the development and has government
purpose rights but further investigation is required to confirm.
Mr. Taylor. What would it cost to terminate the current development
EFV contract?
Mr. Smith and Colonel Taylor. Closeout of the existing contract
with General Dynamics Amphibious Systems is estimated to cost $70M
which was derived during the Nunn-McCurdy Certification process. An
accurate cost determination would need to come from a Termination
Contracting Officer at DCMA.
Mr. Taylor. How much of a delay in getting the first operational
EFV to Marines would be caused by terminating the current EFV contract
and starting over with a new competition in Fiscal Year 2008?
Mr. Smith and Colonel Taylor. The delay would be at least five
years. This is based on assuming a contract award for a preliminary
design in FY 2008, followed by a detailed design with a Critical Design
Review which would not occur until FY 2010; then fabrication of the new
prototypes through FY 2012 with Developmental Test and Evaluation
through FY 2014, followed by an Operational Assessment occurring in FY
2016 and subsequent Milestone C if successful. The currently approved
restructured EFV Program is scheduled to reach Initial Operational
capability in 2015; the earliest estimate for the alternative program
is 2022.
Mr. Taylor. Has any Department of Defense, Department of the Navy,
Marine Corp., or other government agency employee who had oversight or
management authority over the EFV program become an employee of General
Dynamics after leaving government service? If so, in what capacities
did they serve while in government service and in what capacities have
they worked for General Dynamics since leaving government service?
Mr. Smith and Colonel Taylor. Yes. General Dynamics has provided a
letter to Congress detailing certain individuals that fit this
category.
Mr. Taylor. Were any design options featuring a ``v-shaped'' hull
considered at any time in the EFV program's history?
Mr. Smith and Colonel Taylor. Yes, but not for mine blast purposes.
The dihedral concept was first considered for over-the-water
habitability effects from high-speed landings in order to evaluate ride
suitability for delivering Marines to battle positions without
degrading their fighting capabilities. A Full-Scale Hydrodynamic
Vehicle (FSHV) for a future Landing Vehicle Assault of planning hull
type served as a technology forerunner to the Advanced Assault
Amphibious Vehicle and later became the EFV. The FSHV was tested at
Camp Pendleton, California, in 1979. It was determined the inherent
form of a tracked vehicle and the nature of tracked vehicle suspensions
do not lend themselves to V-bottom designs.
______
QUESTIONS SUBMITTED BY MR. FORBES
Mr. Forbes. Do you believe that General Dynamics performance
justifies the $82 million the company earned in award fees? To put this
in a forward looking context, how is the new award fees structured to
ensure that the Navy and the taxpayers are not providing awards when
the overall performance clearly falls short of expectations?
General Gardner. From 1996 to 2007, the EFV program's prime
contractor, General Dynamics (GD) was paid approximately $1.7B for
contract efforts performed during the developmental phases of the
program. Approximately $125M of the total has been paid in fees ($43M
in base fee and $82M in award fee), representing approximately 8.1 % of
the total contract costs incurred to date ($1.53B). GD was entitled to
the fee earned in accordance with the stated terms and conditions of
each legally-binding contract. The earned award fee was specifically
subject to government evaluation of performance in accordance with
established criteria at the beginning of each performance period. The
criteria varied with each period to target key risk areas particular to
that phase of the program. When performance was less than required,
award fee was denied. To date, GD has been denied $21M in award fee
(they have received $82M of a total $103M available to earn, an average
of 79%).
Although EFV reliability performance fell short of the plan for
this stage of the program, resulting in an extended development period,
many other vehicle performance capabilities have been demonstrated at
their required values due to the significant amount of effort performed
during the development phase. These capabilities include firepower,
water speed, land speed, carrying capacity, and interoperability
performance.
The development period included highly complex GD engineering and
design efforts associated with developing a combat vehicle that can not
only match the M1A1 tank's land speed but can also launch from naval
ships 25 nautical miles offshore and transition to the shore within one
hour (at approximately 20 knots). In comparison, the currently-fielded
vehicle, the Assault Amphibian Vehicle (AAV) launches from ships
approximately 2 nm offshore and has a peak water speed of approximately
5 knots. Accordingly, the EFV program determined cost type contracts
were appropriate due to the risk associated with the complexity of the
requirements. Cost type contracts are typically used at this stage of
development in most acquisition programs. The EFV program negotiated
Cost Plus Award Fee (CPAF) type contracts (maximum base fee of 3%,
maximum award fee negotiable), rather than Cost Plus Fixed Fee (CPFF)
contracts (maximum total fee of 10%), to provide a greater incentive to
the contractor to prove out advanced technological design solutions and
to give the government greater control over fee paid to the contractor.
The maximum fee possible on any of the GD CPAF contracts awarded to
date is 11.5%, with 3% allocated to base fee and 8.5% allocated to
award fee. Of the 11.5% fee available, GD has earned 8.1 %, appreciably
less than the 10% the Contractor could have received for a CPFF
contract.
The EFV program office recently restructured the current SDD
contract award fee provisions. This incorporated objective criteria for
cost, schedule and performance based on the program restructure.
Specifically, in June 2007, the EFV program successfully renegotiated
the award fee provisions for the SDD contract to tie available award
fee pools to the successful execution of Systems Engineering reviews
and to replace existing, subjective criteria with well-defined
objective targets for cost, schedule and technical performance,
including demonstration of the ability to achieve the reliability
requirement. A multiple-incentive structure was implemented whereby
General Dynamics must earn a fee in each category or forgo the fee
entirely. This new structure promotes a balanced approach so that no
one category is favored to the detriment of the overall performance of
the EFV.
Mr. Forbes. Do you believe that General Dynamics performance
justifies the $82 million the company earned in award fees? I
understand that the contractor did win a large percentage of the
incentive award fees, so I would be interested to know what objectives
were met to warrant the fees? To put it in a forward looking context,
how is the new award fees structured to ensure that we are not
providing financial awards when the overall performance clearly falls
short of expectations?
Mr. Smith. From 1996 to 2007, the EFV program's prime contractor,
General Dynamics (GD) was paid approximately $1.7B for contract efforts
performed during the developmental phases of the program. Approximately
$125M of the total has been paid in fees ($43M in base fee and $82M in
award fee), representing approximately 8.1% of the total contract costs
incurred to date ($1.53B). GD was entitled to the fee earned in
accordance with the stated terms and conditions of each legally-binding
contract, negotiated in the mid-1990s. However, the earned award fee
was specifically subject to government evaluation of performance in
accordance with established criteria at the beginning of each
performance period. The criteria varied with each period to target key
risk areas particular to that phase of the program. When performance
was less than required, award fee was denied. To date, GD has been
denied $21M in award fee (they have received $82M of a total $103M
available to earn, an average of 79%).
Although EFV reliability performance fell short of the plan for
this stage of the program, resulting in an extended development period,
all other vehicle performance capabilities have been demonstrated at
their required values due to the significant amount of effort performed
during the development phase. These capabilities include firepower,
water speed, land speed, carrying capacity, and interoperability
performance. Reliability was not achieved since the performance
parameters could not be demonstrated consistently through out testing.
The development period included highly complex GD engineering and
design efforts associated with developing a combat vehicle that can not
only match the M1A1 tank's land speed but can also launch from naval
ships 25 nautical miles offshore and transition to the shore within one
hour (at approximately 20 knots). In comparison, the currently-fielded
vehicle, the Assault Amphibian Vehicle (AAV) launches from ships
approximately two nautical miles offshore and has a peak water speed of
approximately five knots. Accordingly, the EFV program determined cost
type contracts were appropriate due to the risk associated with the
complexity of the requirements. Cost type contracts are typically used
at this stage of development in most acquisition programs. The EFV
program negotiated Cost Plus Award Fee (CPAF) type contracts (maximum
base fee of 3%, maximum award fee negotiable), rather than Cost Plus
Fixed Fee (CPFF) contracts (maximum total fee of 10%), to provide a
greater incentive to the contractor to prove out advanced technological
design solutions and to give the government greater control over fee
paid to the contractor. The maximum fee possible on any of the GD CPAF
contracts awarded to date is 11.5%, with 3% allocated to base fee and
8.5% allocated to award fee. Of the 11.5% fee available, GD has earned
8.1%, appreciably less than the 10% the Contractor could have received
for a CPFF contract.
The EFV program office recently restructured the current SDD
contract award fee provisions. The newly restructured contract
incorporates objective criteria for cost, schedule and performance
based on the program restructure. Specifically, in June 2007, the EFV
program successfully renegotiated the award fee provisions for the SDD
contract to tie available award fee pools to the successful execution
of Systems Engineering reviews and to replace existing, subjective
criteria with well-defined objective targets for cost, schedule and
technical performance, including demonstration of the ability to
achieve the reliability requirement. A multiple-incentive structure was
implemented whereby General Dynamics must earn a fee in each category
or forgo the fee entirely. This new structure promotes a balanced
approach so that no one category is favored to the detriment of the
overall performance of the EFV.
Mr. Forbes. How can the Secretary of the Navy certify to Congress
that no alternatives exist to the program as required by a Nunn-McCurdy
certification, while also requiring the Marine Corps to develop a plan
for an alternative program should the risk mitigation plan fail?
General Gardner. The Nunn-McCurdy certification pertained to the
context of existing alternatives, based on the Joint Requirements
Oversight Committee (JROC) affirmation of the need for a high-speed
amphibious assault capability. Secretary Krieg's decision to certify
that no alternatives exist included careful consideration for the
element of time. That is, he found that no alternative program could
deliver the same capability in a reasonable time, compared to the EFV
program. For example, the restructured EFV Program is scheduled to
reach Initial Operating Capability (IOC) in 2015; the earliest estimate
for an alternative program is 2022. Consequently, under scrutiny, the
EFV Program was certified and restructured to mitigate the risk in
acquiring the defined capability. As a prudent initiative to further
address the potential program risks, despite the newly proposed
timeframe and available resources, the Acquisition Decision Memorandum
ADM directed the development of an ``alternative way ahead''--a
contingency plan in order to have an option ``if the risk burn-down
plan for EFV is not successful.''
Mr. Forbes. How can the Secretary certify to Congress that no
alternatives exist to the program, while also requiring the Marine
Corps to develop a plan for an alternative program should the risk
mitigation plan fail?
Mr. Smith. A Nunn-McCurdy certification pertains to the context of
existing alternatives. Based on the Joint Requirements Oversight
Committee's affirmation of the need for a high-speed amphibious assault
capability, Secretary Krieg's decision to certify that no alternatives
exist included careful consideration of the element of time. That is,
no alternative program could be executed and deliver the same
capability in a reasonable time, compared to the current EFV program.
The restructured EFV Program is scheduled to reach Initial Operating
Capability in 2015; the earliest estimate for an alternative program is
2022. Consequently, under scrutiny, the EFV Program was certified and
restructured to mitigate the risk in acquiring the defined capability.
As a prudent initiative to further address the potential program risks,
the Acquisition Decision Memorandum directed the development of an
``alternative way ahead'' in order to have an option if the risk
mitigation plan for EFV is not successful. Note that the alternative
does not propose a completely new vehicle, since much of the design has
proven to be sound, but addresses the higher risk parts of the program.
Mr. Forbes. How have the wars in Iraq and Afghanistan changed the
Marines Corps' plan for providing mobility once Marines get ashore? How
is the Marine Corps' balancing its two missions of amphibious assaults
and participation in long-term, irregular warfare?
General Gardner. Lessons learned from operations in Iraq and
Afghanistan, past Marine Corps operations, and operations conducted by
other services and nations, combined with the 2006 Strategic Planning
Guidance (SPG) tasking the Marine Corps to ``consider an appropriate
mix of vehicles to support irregular operations'' have shaped our
tactical ground mobility portfolio. Mobility for Marines ashore will
continue to be provided by the Marine Air Ground Task Force through air
and ground systems; however the most significant change in our plan for
providing future ground mobility stems from force protection
requirements generated by the current Improvised Explosive Device
threat. Force protection, amphibious lift and range, night vision,
speed, adequate firepower, strong reliability, and ease of maintenance
have always been key characteristics of Marine Corps ground mobility,
but the level of armored protection required in all future ground
mobility systems is now a main component driving both operational and
acquisition planning.
Amphibious forcible entry operations are maneuver operations where
lethality and survivability are measured to some extent by our ability
to disperse or concentrate forces. While ability to maneuver remains a
factor in irregular operations, two other facets have forced a change
in requirements placed on Marines and their equipment. First is the
necessity to maintain proximity with the population. Second, maneuver
is constrained when Marine forces move into more populated areas where
their activities, tactics, and vulnerabilities can be discretely
observed by an enemy who specializes in blending with the population.
Faced with this new limited ability to maneuver, we found a need to
adopt tactics and subsequently, reevaluated our vehicle requirements.
The Marine Corps is balancing our two missions of amphibious assaults
and participation in long-term, irregular warfare by shifting from a
largely singular focus on amphibious forcible entry to a mix of
platforms that have application across the range of military
operations. We have tailored our Expeditionary Fighting Vehicle
investment to be consistent with the SPG and have initiated the Marine
Personnel Carrier and the Joint Light Tactical Vehicle programs, both
of which seek improved performance and payload while providing vehicle
occupants with enhanced protection against the ubiquitous threats of
mines and IEDs that characterize operations where constrained maneuver
forces us to operate in areas in spite of the known hazards.
We will continue to pursue a balance of vehicles that will enable
our Navy-Marine Corps team to increasingly provide a persistent and
flexible forward presence, both afloat and ashore, to meet combatant
commanders' growing requirements for general purpose forces. Our future
mobility systems will enable us to more effectively engage in low-end
shaping, deterrence, and security missions while also positioning us to
respond to high-end combat and forcible entry amphibious operations.
Mr. Forbes. How have the wars in Iraq and Afghanistan changes the
Marines Corps' plan for providing mobility once Marines get ashore? How
is the Marine Corps' balancing its two missions of amphibious assaults
and participation in long-term, irregular warfare?
Colonel Taylor. Mobility for Marines ashore will continue to be
provided by the Marine Air Ground Task Force through air and ground
systems. The 2006 Strategic Planning Guidance (SPG) tasked the Marine
Corps to ``consider an appropriate mix of vehicles to support irregular
operations.'' It is that task, combined with lessons learned from
operations in Iraq and Afghanistan, as well as lessons learned by past
Marine Corps operations and operations conducted by other services and
nations, that has served to shape our tactical ground mobility
portfolio. The largest change in the Marine Corps' plan for providing
future ground mobility stems from the force protection requirements
generated by the current Improvised Explosive Device threat. Force
protection, amphibious lift and range, night vision, speed, adequate
firepower, strong reliability, and ease of maintenance have always been
key characteristics of Marine Corps ground mobility; but the level of
armored protection required in all future ground mobility systems is
now a main component driving both operational and acquisition planning.
Amphibious forcible entry operations are maneuver operations where
lethality and survivability are both measured to some extent by our
ability to disperse or concentrate our forces. While the ability to
maneuver remains a factor in irregular operations, two other factors
influence these operations and force a change in the requirements
placed on the Marines and their equipment. The first is the necessity
of proximity. Positively influencing populations require that our
Marines remain close to that population. In doing so, the second
factor, constrained maneuver, is introduced. Marine forces move into
urban areas, or at least those areas that are more populated. In doing
so, their activities, their tactics, and their vulnerabilities can be
discretely observed by an enemy who specializes in blending with the
population. Faced with a limited ability to maneuver, tactics must be
adopted to changing situations and equipment developed and fielded to
support forcible entry operations, particularly from the sea, may
become less suitable when faced with constrained maneuver. It is these
conditions that caused the Marine Corps to reevaluate its vehicle
requirements and ultimately caused a shift from a largely singular
focus on amphibious forcible entry to a mix of platforms that have
application across the range of military operations. We have tailored
our Expeditionary Fighting Vehicle investment to be consistent with the
SPG and we have initiated the Marine Personnel Carrier and the Joint
Light Tactical Vehicle programs, both of which seek improved
performance and payload and are planned to provide vehicle occupants
with enhanced protection against the ubiquitous threats of mines and
IEDs that characterize operations where constrained maneuver, forces us
to operate in areas in spite of the known hazards.
In order to ensure the Marine Corps remains the most ready when the
nation is least ready, our weapons, vehicles, and aircraft--the tools
of our trade--must be sufficiently flexible to support operations
across a wide spectrum of conflict. In the case of ground mobility
systems, we will continue to pursue a balance of vehicles that will
enable our Navy-Marine Corps team to increasingly provide a persistent
and flexible forward presence, both afloat and ashore, to meet the
combatant commanders' growing requirements for general purpose forces.
Our future mobility systems will enable us to more effectively engage
in both low-end shaping, deterrence, and security missions while also
positioning us to respond to high-end combat and forcible entry
amphibious operations.